‘A Potential For Severe Delinquencies’ Over 12-24 Months
Another mortgage REIT has called off a press conference. “Saxon Capital, Inc., a residential mortgage lending and servicing real estate investment trust (REIT), today announced it is delaying its 2005 fourth quarter and year end earnings press release and related conference call. The Company expects to report its complete operating results on or before March 31, 2006.”
“Management is reviewing the..derivative transactions used in its hedging strategy to manage interest rate risks from 2001 to the third quarter of 2005. If the Company determines that it did not meet the requirements of SFAS 133, a restatement of results from 2001 to the third quarter of 2005 may be required. ‘We are disappointed in this delay, but need more time to review these complex accounting issues before reporting our results,’ said Michael Sawyer, CEO of Saxon. Robert Eastep, CFO of Saxon said, ‘In light of recent scrutiny as to the application of hedge accounting, we are reviewing our accounting treatment of our derivative transactions related to our hedging strategy to ensure that our financial statements adhere to SFAS 133.”
“The Mortgage Loan Operations segment originates, purchases, and securitizes primarily nonconforming residential mortgage loans.”
From Market Watch. “The FDIC reported that industry net income of $32.9 billion fell 5% from the record set in the third quarter. ‘What we see is a banking industry that is fundamentally strong but continues to face some important challenges ahead,’ Martin Gruenberg, the FDIC’s acting chairman said.”
“Among the highlights of the FDIC report, growth in residential mortgage assets increased by $24 billion, the smallest quarterly increase in two years. Also, the net interest margin fell to 3.49% from 3.5% in the fourth quarter, a 15-year low also seen in the second quarter. ‘As short-term interest rates rose more rapidly than longer-term rates, the difference between them has narrowed,’ the FDIC said.”
“‘The narrower spread has made depository institutions’ traditional business of taking deposits and making loans less profitable, as banks and thrifts tend to make longer-term loans and fund them with shorter-term deposits.’”
“In the wake of the prime lending sector’s refinance contraction, the nonprime sector has picked up and become more mainstream, accounting for 28% of total loan originations, according to a panel member at the MBA Expo in Phoenix. Michael Drawdy, senior vice president at Countrywide Financial Corp., said half of subprime ARMs will be due in the summer and over the next 14 months. ‘There will be some people who can’t pay for an ARM change,’ Mr. Drawdy said.”
“‘That is why you must make sure there is a system in place for collections, to make sure borrowers know their options.’ Panelists talked about repayment plans and ARM modifications aimed at helping borrowers stay in their homes. Over the next 12-24 months, there is a potential for severe delinquencies, they said.”
Interesting, they stopped this particular hedging practice before the fourth quarter. Obviously they knew something was wrong last September.
I’ll bet that there was some form of rollover mechanism that worked as long as there were high margins so instead of hedging it had the effect of pushing losses forward. There isn’t a circle of hell deep enough for these charlatans.
Don’t know why - but, this comment made me smile.
Enron in the mortgage banking industry.
The hedging obsfucation is eerily reminiscent.
Yes, one of the biggest challenges will be remaining solvent, followed by the challenge of staying out of the Pink Sheets, followed by the challenge of testifying in front of Congress during the hearings we will all be watching about 2 years from now, followed by the challenge of staying out of a Federal pokey when their shenanigans are exposed.
This is the third mortgage REIT or originator this month that canceled a press conference on the scheduled day. Surely that’s a story in itself, Wall Street Journal.
I can see more regulation of lenders coming out of all this. I know the feds can regulate their banks and members but can they really regulate the whole industry efficiently? I have read that a lot of lenders are now loaning private money and money from international sources. I wonder if they can really regulate their way out of this.
Here come the chickens….
The best regulation is skeptical investors. Once investors understand that MBSs can be risky, they will start paying attention to what they are buying.
But without information, there aren’t informed decisions being made. Transparency is the key to any market, and the RE market is as transparent as 2 inches of stainless steel.
If MBS investors were more skeptical, they would demand (and receive) transparancy.
A lot of the MBS holders sold their defualt risk off to hedge funds and big banks through untested derivatives. These holders don’t care that the asset values that back up the paper are inflated and often fraudulent.
A banking crisis seems more and more likely the more we find out about the craziness going on with $trillions of derivatives being created. Regulation is surely needed. No amount of transparancy will prevent middle men from churning increasing amounts of credit default swaps or passing along bad mortgages while their cut of the increasing volume gets larger and larger.
Thanks to the reader who sent in the brokeruniverse link. From the update:
‘In the wake of the prime lending sector’s refinance contraction, the nonprime sector has picked up and become more mainstream, accounting for 28% of total loan originations, according to a panel member at the MBA Expo in Phoenix. Michael Drawdy, senior vice president at Countrywide Financial Corp., said half of subprime ARMs will be due in the summer and over the next 14 months. ‘There will be some people who can’t pay for an ARM change,’ Mr. Drawdy said.’
‘That is why you must make sure there is a system in place for collections, to make sure borrowers know their options.’ Panelists talked about repayment plans and ARM modifications aimed at helping borrowers stay in their homes. Over the next 12-24 months, there is a potential for severe delinquencies, they said.
#1.. Bankrupcy laws are much tougher…
#2..Many of these loans were “Refi’s” and may not be protected by D/T assignment of rents forclosure process..They may (?) be subject to a judicial forclosure and a deliquency judgement…
Can you comment LALAW ???
If a lender has refinanced, then they will not be able to walk away. The loan will be a recourse loan (unlike purchase loans) and follow the FB until repayment or Bankruptcy.
d*mn you’re a real treasure to this blog.
So basically you are saying if they bought an overpriced home they can simply walk away and all they lose is credit if they did 100% financing. What if they had a 2nd such as heloc? Can they walk away from this too? Basically they are gambleing w/ no money and the downside is credit damage. Something seems wrong with this picture.
From what I’ve read (I’m not a lawyer) If you walk away owing $100,000 more than the value of the house then that $100k is counted as income for tax purposes so the IRS gets revenge on the behalf of bankers. Maybe LALawyer can clear this up???
If this is a personal residence, then yes, income to the defaulting borrower (not discharged in BK).
If the FB used stated income which was fraudulent even if it was purchase money the FB can’t walk. Double F.
Is this applicable for California property. During the last downturn people just walked away with nothing more than credit damage. Whether it was a refi or purchase. Or is this something new as a direct result of the new BK laws.
There’s the law, and then there’s the real world. Are banks going to sue every customer who walks away?
dwr-
I agree, but then there’s the flip side of that. If bankers automated a system for filing and recording of what would amount to defiency(sp?) judgements like they have for foreclosures and evictions in a lot of cases. I think they would have done that. Even if they sold the resulting judgements to collection agencies for .25 cents on the dollar just to recoup some of the money that was lost. I mean these guys weren’t losing 5 grand here 10 grand there they were losing a ton of money. I personally sold a property where the bank took it back at 250k plus legal and back payments for 75k. So even if they could get 25% of that 175k loss I would think they would do it. Hell I would.
Do you think collection agencies are going to buy judgments for valuable consideration when the debtor has a 500 credit score, no savings at all, and owes $175K?
Yea, they do it all the time. In this type of instance they may not put up cash but arrange a consignment and recieve a commission for every dollar they collect. IMHO it would be a lot more lucrative then chasing defaulted cable bills. Especially if someone wants to get out of debtors prison or buy another home they are going to want to pay it off or attempt too.
Consignment is quite a bit different from purchasing the bad debt as you previously opined. And to the debt collectors trying to collect tens of thousands of dollars from someone who couldn’t come up with $2000 for a down payment, I say “good luck”!
True enough, IMO consignment is the better option if I were a buyer but I do think there would be a cash market if the price were right. During the last downturn lenders were selling non-performing paper at .10 cents on the dollar. And investors were all over it. There’s a market for everything. The thing about the 100% financing is that quite a few of these people could have put $2000 or something into the property whether it be 3%, 5 %,10% or whatever. Most had to put closing costs into it. they simply opted not to put more into the property. Now mind you there were a lot who didn’t have 2 nickels to rub together and had no business buying a mortgage we’ll see them on the court steps first.
Debt collectors if they had the opportunity would be all over this opportunity if it presented itself because there would be large dollars to be made. Especially if a consumer paying it off would mean that another sub-prime lender would give them a loan.
You might want to elaborate on whether you’re speaking specifically to California or other states as well.
IMHO the 100% purchases are no recourse unless they are an 80/20. Any HELOC makes the borrower liable for the whole sum. The banks do not have to sue into default they can 1099 the defaulted borrower who will then be responsible for the taxes. BK does not eliminate IRS tax problems.
But the “homeowner” has still walked away hasn’t he? He might have some IRS problems but he’s not making $4000 IO payments any more.
How would you like to have a $200,000 reported income that results in you owing the IRS $65,000 at 18% interest and it never goes away and its always on your credit and your essentially in debtors prison for the duration. I do not consider that walking away.
What are people going to choose, making $4000 IO payments on a property that’s $200,000 under water, or allowing the property to go into foreclosure and worrying about the IRS next year? Plus, if there are hundreds of thousands of people in that same boat, don’t you think the people who buy our votes every day will do something to help these “victims” out? C’mon, think about how things really work.
How things really work is that people will bely all common sense when it comes to holding onto a property. Whether they are 200k underwater or not. Just look at how the current situation is unraveling. Instead of someone dropping their price 20% and shedding themselves of future pain they would rather hold on and continue to pay a negative. Why? Because real estate always goes up.
And looking for politicians to do something, they didn’t do much last time why would they start now.
they would hold on to it only till that point where they have to give up.
Paying 4000 while a rental could cost only 2000 has got to hurt some time!. I believe they will give up after some time. Friends and family will help them too, this time in the reverse way!. “You are a fool to pay so much, just walk away”.
Also paying a car loan would get them to work, what would one do by keeping the home while car is repossesed!??
One thing that could hold them back is new bankrupcy law. However, in CA household median in come is ONLY 55K, this could be gamed!. One of them(hubby or wife) could quit a job (if not laid off) and they fall below the median. Now bankrupcy is a viable option!
Atleast I know it from one guy who walked away from his home 80s, even when he had cash in the bank for more than 12 months payment. He did pay the mortgage for about a year after the home price started going down(his home wsa upside down). After that he said, the risk was screwing up the credit score, he gets to keep the cash! good thing was he did not refinance! otherwise the lender would have come after the cash in the bank
“And looking for politicians to do something, they didn’t do much last time why would they start now.”
Because this bubble is about 10 times as big as the last one.
“Just look at how the current situation is unraveling. Instead of someone dropping their price 20% and shedding themselves of future pain they would rather hold on and continue to pay a negative. Why? Because real estate always goes up.”
Most people are still 100% convinced that things will take off again in the spring. If this were a baseball game, the home team just threw the first pitch. Wait till the third inning and then get back to me.
I hate sometimes when Im right…
I won’t fill up Ben’s blog with this entire article. Anyone who is interested in tax consequences as well as the difference between recourse and non-recourse loans, take a look at this link.
http://www.wwlaw.com/forecl.htm
http://www.stimmel-law.com/articles/CA_AntiDeficiency_Statue_ProtHomeOwnMonJudge.html
This is actually a little clearer article.
________________________
THE CALIFORNIA ANTI DEFICIENCY STATUE: PROTECTING THE HOME OWNER FROM MONEY JUDGMENT AFTER FORECLOSURE
Introduction:
In California, if you owe money secured with a purchase money mortgage or deed of trust (e.g. the money was used to purchase the dwelling) the holder of the Deed of Trust or Mortgage is prohibited from seeking to collect on the Note any sums more than it recovers from foreclosure even if the sums from foreclosure are less than the amount due on the Note (see the article on Promissory Notes-The Basics.)
This powerful protection for the home owner (and for certain others as described below) means that if you default on the Note and are sued or the property securing the Note is subject to foreclosure, the money you will have to pay for the Note secured by your dwelling will be limited to the actual equity in your dwelling and the financial institution is simply out of luck if that foreclosure sale does not pay them the entire amount due on the Note. For example, if you owe five hundred thousand dollars still on the Note secured by your home and, due to your failure to pay, the bank forecloses but due to lower home prices the home is only sold by the bank’s trustee for four hundred thousand, the bank has no right to sue you for the remaining one hundred thousand due under the Note. This is called the Anti Deficiency Statute in that the deficiency between the proceeds from foreclosure and the amount of the Note cannot be made up by a separate suit on the Note.
There are numerous angles and oddities about this law, some discussed below, but this article shall seek to outline the basics of this all important aspect of borrowing to purchase a dwelling.
The Basic Law:
California Code of Civil Procedure Section 580 b states the basic law:
No deficiency judgment shall lie in any event after a sale of real property or an estate for years therein for failure of the purchaser to complete his or her contract for sale, or under a deed of trust or mortgage given to the vendor to secure payment of the balance of the purchase price of that real property or estate for years therein, or under a deed of trust on a dwelling for not more than four families given to a lender to secure repayment of a loan which was in fact used to pay all or part of the purchase price of that dwelling occupied, entirely, or in part, by the purchaser.
The above section should be read carefully. Note that the structure must be a home of the person claiming the protection but it can also be home to up to three additional families. Note that the loan must have been incurred for the purpose of purchasing the property. And note that the holder of the deed of trust or mortgage is barred only after seeking recovery from the secured home.
The definition of an ordinary purchase money mortgage has been clearly defined by the courts: it is a mortgage (or deed of trust) given by the purchaser at the time of the conveyance of land to secure the unpaid balance for the price. Stockton Savings & Loan Bank vs. Massanet (1941) 18 C2d, 200, 207. There are literally hundreds of cases involving complex transactions (e.g. the buyer transferred the Note, the buyer sold part of the property, etc, etc.) so the issue can become quite complex but the basic thrust of the law is clear: protection of the home owner from having to lose the home plus pay to the financing entity additional sums due to depreciation of property prices.
Because of this statutory goal of protection of the homeowner, the law has been liberally construed to include many transactions that might not seem strictly within the definition. For example, if one takes out a construction loan to build a dwelling and completes same, the construction loan has been held to be equivalent to a purchase money mortgage and subject to the protection of the statute. Allstate Savings & Loan Assn. v Murphy (1979) 98 C.A. 3d 761.
(DO NOT CONFUSE THE ANTI DEFICIENCY PROTECTION OF SECTION 580b WITH THE “SINGLE ACTION RULE” OF CODE OF CIVIL PROCEDURE SECTION 726 WHICH REQUIRES THE CREDITOR TO PROCEED ON FORECLOSING THE SECURITY RATHER THAN SUING ON THE NOTE IN A “SINGLE ACTION.” THAT SECTION IS DISCUSSED ELSEWHERE IN THIS WEBSITE. )
Waiver of The Protection:
A common mistake of those seeking protection under Section 580b is to assume that the protection cannot be waived. It is true that the protection of 580b cannot be waived in advance, e.g. in the Note or Deed of Trust executed. However, the protective provisions can be waived by subsequent conduct of the debtor including a written agreement to so waive. The leading case is Russell v Roberts (1974) 39 CA 3d 390 in which an agreement with the creditor for an extension of time to pay in return for the waiver was upheld by the Court.
Thus the most critical time for the debtor normally occurs during the weeks after default is declared on payment of the Note and the creditor suggests various ways that the foreclosure can be delayed or stopped if the debtor merely agrees to pay some additional sums and/or waives the protection of the anti deficiency statute. All too often the debtor, hoping to rectify the situation, signs documents that end up waiving vital protections, not fully understanding how dangerous that can be.
The Economic Ramifications of the Anti Deficiency Statute
Just because the bank cannot proceed independently in a separate action for the deficiency against the borrower does not mean the borrower does not suffer. First, the borrower will lose the home in the foreclosure sale. Second the credit history of the borrower will be adversely affected, usually for at least seven years.
There is also danger for the financial institutions in the event the market truly deteriorates. Their security is only as good as the equity on the property. With people borrowing up to ninety percent of the value of the home in an appreciated market, any real deterioration of property values means that the banks will quickly lose any value to their security and the anti deficiency statute means that they will not be able to proceed against the other assets of the borrower. Banks normally carry debts on their books showing equity securing the debt at the value of the property when the loan was made. It is clear to many professionals in real estate that a reduction in value of property in this state could easily result in economic catastrophe to the lending institutions who would find their secured loans as essentially unsecured.
The “Dwelling” Requirement
Note that the protection is only afforded the dwelling of the borrower on the purchase money mortgage but that the building can be up to four family dwelling buildings thus would cover the standard duplex, triplex or fourplex IF the holder of the Note also lives there. The protection does not exist for non dwelling security, e.g. commercial property or rental property in which the borrower does not dwell.
Junior Lien Holders (Second Deeds of Trust, etc.)
Note that if the holder of junior liens secures notes not used to purchase the property (thus are not purchase money mortgages) that the protection of this statute would not apply. (Thus “equity lines” used to purchase other things would not require the financial institution to comply with the anti deficiency statute.)
Assuming for the moment there are two lenders who loaned money to purchase the home, each taking back a Deed of Trust or mortgage, in that case, even if the holder of the first deed of Trust wipes out all the equity on the property by their foreclosure, the second deed of trust holder is still barred from seeking relief directly against the borrow under Section 580b. (Brown v Jensen (1953) 41 C.2d, 193.) But be careful here, for the courts have at times eliminated that defense in various complex transactions and refinancing.
Conclusion
Property owners must take time to carefully consider the value of the protections afforded by this statute before taking actions that could forever lose its protection. One of our clients moved from her duplex to live with her sister in another state and when reversals in her business caused her to examine her asset/liability situation she found to her shock that the anti deficiency statute no longer protected her on her prior home precisely because it was no longer her dwelling. She had at first thought her risk was only the equity in the property. She found out that the entire Note, hundreds of thousands greater than the equity, was now a debt she would have to face. When she moved out of the state it never occurred to her to consider the long term effect ending the “dwelling status” of the property would have. A little foresight…or a visit to her accountant and lawyer to discuss risks…would have saved her much anguish.
Thanks for the post. If I read it correctly in California “the dwelling” requirement is applicable to primary residence. So second home owners may be screwed.
Interesting to note “to lose the home plus pay to the financing entity additional sums due to depreciation of property prices.”
I guess the politicos who wrote that never realized that in California - Property never goes down!!
Thanks for that clarity LALAWYER
Don’t you know the word ‘FORECLOSURE’.OR- Deed in Lieu. Don’t sugar coat it. Wawawawawawawawa bahbahbahbah Tough Luck Life is not fair Help me Kennedy
Add another member to the potentail default list. Just when you think all the greater fools have jumped in, one stands up right next to you.
One of my employees came to me last week and said the owners of the house he was renting offered him first chance to purchase the home as they plan on putting it on the market next month. He told me he was looking into an interest only loan and thought his payments would be around $4,200.00/month.
I had very straight forward, 30 minute conversation with him about the current housing market, the risk of I/Os, interest rates, and the potential future of the economy as a hole.
Keep in mind he is my Director of Sales, and sales were down almost 40% in Q4 for us, and not fairing much better here in Q1. During that time I have advised that we may incurr some lay offs as a result (him included).
He came to me this morning and said he was going to go ahead and make an offer on the house.
I really believe people have lost all sense of reality, and are closing their eyes hoping that someone is going to come along and save them.
like the higher father being referred by our pres.
He will only save you from Spiritual bankruptcy!
He will learn. Sometimes you have to learn by your own mistakes.
“the potential future of the economy as a hole.”
Works even better without the ‘w’
The future economy as a black hole….
Do you mean that the economy is heading into a hole? Or do you mean that the economy would work better without “W”? HAHAHA
Wow that’s insane here your boss is telling you point blank to your face that due to the economy that you may not have a job in a few months. Along with that he advises you that the housing market is crap and you may want to hold off based on the fact that you may be laid off. Then you still walk into a $4,200.00 a month note. What I want to know is what is he smoking, How much does it cost, where can I get it. I’m going to buy large quantities of it and go into a new kind of business. Unbelievable.
He deserves what’s coming but he will probably blame his boss for not running a top flight organization. It will always be someone else’s fault.
Again unbelievable.
I would never work for that moron. Time to start looking.
I disagree with the assesment of the boss being a moron. He’s being upfront. Truth hurts but I prefer it too bs. But your right based on the first conversation of pending layoffs I would have started looking but in no way would I have incurred a house note untill I had found another job.
Just to clarify, I meant the Director of Sales.
He works for me. I just attempted to offer him some sound advice, and help avoid some potentailly painful times down the road.
Advice he should have heeded
wow, that story is just too sad. this last round of people are gonna have the saddest stories. kudos to you iknowso for doing what you could to stop him.
and thanks to LALawyer and others for the clarifications on the laws here, very interesting!
My theory is that the slumping economy, wages, etc. has made people more likely to buy because they see RE as a road to riches, guaranteed appreciation, insurance. Sounds counterintuitive but these are crazy times.
I offered my renter of the last investment property I own the same option last month. Paying $850 rent he couldn’t get a $1300 mortgage. Instead, my realtor is buying from me! Actually he is motivated by a 1031 squeeze. I get my outrageous price, he saves on a huge tax bill my renter stays in place. After taxes the remainder will generate more interest income than the retal after expenses. That’s obscene especially since we’ll be buying back -several- similar properties in a few years.
Outstanding. I just did the same thing. Its so nice to get your monthly statement with interest payment. Compare that to looking for a rent payment, paying the mortgage, taxes and insurance, dealing with tenants, dealing with repairs and so on …
i think you need a sales mgr with some common sense…that may help your bottom line,if he is so out of tune with today business climate how effective can he be as a sales mgr.
Absolutely correct. I am working on it.
Now that is funny
Fire him! Anybody displaying such incredible lack of good judgement — especially after having his boss (you) enlighten him — needs a swift dose of reality. If he’s suddenly unemployed he won’t make one of the worst mistakes of his life, and he certainly won’t make similar mistakes that’ll cost your company, either.
“The Mortgage Loan Operations segment originates, purchases, and securitizes primarily nonconforming residential mortgage loans.”
Or the stock market equivalent of JUNK BONDS…
The Mike Milken’s of the world are still alive and well.
They are loaning to anyone who walks through the door. Just trying to keep the bucks flowing.
How many times have I said the next 24 months would be CRUCIAL to see how this pans out????
I KNEW this was coming since back in 2003 and 2004. It was just going to take time for all of this ‘crap’ to make its way through the system.
I have covered it pretty indepth on my blog as many of you know…
SoCalMtgGuy
Another F@CKED Borrower
FB FORUMS
Thanks for sharing….Very productive post.
“…there is a potential for severe delinquencies”….
Wow! For a CountryWide Sr. VP to come out and say this instead of the usual rahrah “happy” speak is a real milestone!
I remember how the local RE idiot Gary Watts suggesting that virtually nobody would be affected by ARMS recasting.
LALAW, Looks like we opened not only a can of worms but a lot of eyes….They did not know about difficiancy judgements…And, with the new bankrupsey laws won’t they just turn the deficiancy judgement over to the “Collection Pit Bulls” @ 50 cents on the dollar??? given the new bankrupsey laws the potential for these larde judgements to follow you for a very long time.
Well . . . if this is run as a business or quasi-business, then you will be able to take some of these as losses . . . depends on the person. If it is there primary residence, absolutely they are in hot water (credit-wise and with the IRS) but if this is a business, then they will have some additional options (all bad, but not quite as bad as if you are looking at your home as if it is your primary occupation). Probably lots of lawsuits between IRS and people who are claiming to be Donald Trumps.
LALAW, as a taxlawyer I appreciate your legal posts, however please be careful about your tax conclusions. For all who would like to know the consequences of a loan write-off here is an oversimplied primer.
Section 61(a)(12) of the Internal Revenue Code (IRC) provides that income includes income from the discharge of indebtedness. This is what LALawyer seems to be referring to.
Depite this rule, IRC section 108(d)(3) provides an EXCEPTION to the prior rule. Section 108 provides that to the extent a taxpayer is insolvent (or in bankruptcy) then the income inclusion rule in section 61 does not apply. Thus, for an insolvent taxpayer/former homeowner there would be no tax hit.
question: hedge funds who own MBS or derivatives thereof, when do they panic.?i.e. what does it take for them to see on their screen that their MBS is going down in value? is it just market pricing due to general fear or do they get foreclosure data..default rates…etc …and how often do they get that data?
Driving around San Diego today I heard this ad:
La Boheme (224 unit complex about a mile from my house) is offering $12,000 in closing costs (if you use Dr Horton’s lender).
Not only that, free Fridge, Washer, Dryer, and Window treatments.
Crap! Do you think my home might have lost value?!!!
Well, don’t everyone rush them at once, I might want to pick up a couple to flip myself.
Wait a second, I just realized something. Why should it cost $12K in closing costs for their lender on a property they’ve developed that they’ve probably already done 100 similar loans for?
“Oh, those costs! Well,that’s the cost of foreclosing on you. We’re putting it right up front so there are no hidden surprises! It’s part of our total value treatment!”
If anyone has noticed the San Diego homebuilders have been gobbling up the cable ad space lately. It is funny because they are so competitive. It seems like if one complex offers closing costs +2 years of HOA fees, the next is offering the same + 5k and a kitchen. You get the same story if you go visit the *newly* opened sales offices downtown. There is a new office for every builder!
I say: “San Diego condos for everyone!”
i keep seeing “Employee pricing loans” from greenlight financials
What a joke!
a thousand gnats in their beduin tents……
One of the things I absolutely love about Ben’s blog is the participation of experts from all fields. Excellent posts.
I’ve mentioned this before, but…
One thing a lot of potential “walk away” candidates have failed to consider is that mortgages, car loans, charge cards, etc. will cease to exist in the not-so-distant future for those with damaged credit. Everyone is so conditioned to getting credit thrown at them these past few years that they can’t conceive of any other circumstance.
Hmmm… let me qualify that a bit. Credit will be available, but only at nose-bleed interest rates from “business interests” with collectors named “Guido”.
TJ: in a perfect world that would be true. My cousin declared BK in the mid 90’s and the day after the BK cleared, he got calls from credit Card companies offering him credit cards now that his BK had been cleared. It was unbelievable. He still drove his new shiny car, etc. Maybe with the new BK laws that will not be possible, but people are going to give credit as long as there is a good spread to be made. I also think that BK is available as a once in a lifetime shot?
The 90’s aren’t a valid comparison. Try the 30’s.